Sales of new condominiums in Tokyo have fallen to the lowest since the property bubble collapsed in the 1990s, a sign the real estate boom fueled by Bank of Japan easing is starting to unwind.
New apartment sales in and around the capital fell 32 percent to 13,303 units in the first eight months of the year, the least since 1992, data from the Real Estate Economic Institute Co. show. Potential buyers, faced with almost stagnant wages, are turning down 35-year fixed-interest mortgages as low as 1.06 percent, near the record low of 0.9 percent in August, according to data from the state-run Japan Housing Finance Agency.
"Stagnation in wages is why we are seeing a slowdown in sales of condominiums" in Tokyo, said Takashi Ishizawa, a senior researcher at Mizuho Securities Co. "If you look at interest rates, historically speaking there has never been a better time to buy, but developers without really good properties are having trouble selling."